Japan proposes new FITs, unveils lithium-ion battery subsidies

Share

A panel of experts set up by the Japanese Ministry of Economy, Trade and Industry (METI) aiming to amend the country’s feed-in tariff (FIT) scheme announced its recommendations last week.

The panel recommended that Japan’s FITs for solar PV plants larger than 10 kW be reduced by 11 percent from its current JPY 36 to JPY 32 per kilowatt hour starting April 1. Similarly, FITs for solar PV systems smaller than 10 kW should fall by a minimal 2.6%, from JPY 38 to JPY 37 kilowatt hour, likewise as of April 1.

The panel’s recommendations are under public consultation through March 19 and remain subject to METI approval. Should the proposed FITs receive METI’s approval, which is largely expected to be the case, the reductions will be smaller than Bloomberg New Energy Finance (BNEF) had initially suggested, and closer to Deutsche Bank AG predictions revealed earlier this month.

While the panel kept most renewable energy systems tariffs unchanged or reduced them modestly, it recommended an impressive FIT increase for large offshore wind projects to JPY 36 per kilowatt hour, up from the current JPY 22 per kilowatt hour. FITs for onshore wind projects are suggested to remain unchanged at JPY 22 per kilowatt hour.

All above FITs exclude tax, and Japan is committed to reviewing its feed-in tariffs annually.

The country’s cumulative installed photovoltaic capacity at the end of November 2013 stood at 11.858 GW.

Lithium-ion battery support scheme launched

Furthermore, METI announced it had begun accepting subsidy applications from individuals and entities willing to install 1 KW or larger stationary lithium-ion batteries.

The scheme will cover two-thirds of the cost for qualifying systems only, thus installations need to be assessed by assigned institutions and meet specific technical criteria relating to safety.

Overall, the program will offer up to JPY 1 million to individuals and JPY 100 million to businesses, while the scheme’s budget is capped at JPY 10 billion.

METI said the scheme is a direct response to the energy problems that have resulted since the 2011 Fukushima earthquake and its main goal is to assist controlling the electricity demand through peak times.

By contributing to the cost of battery storage systems deployment, METI added, it also aims to reduce battery prices by mass production effect, therefore facilitating the further expansion of renewable energies.

Apart from the lithium-ion battery scheme, METI is also implementing another program examining the installation and utilization of large-scale storage batteries in electricity grid substations and is funding specific companies developing such projects.

A publicly funded subsidy program for photovoltaic battery storage systems has only been deployed in the past in Germany. The German government slated €25 million for the first year of the scheme commencing May 2013.